00:00It's the most important company in the world, reporting numbers this week.
00:03NVIDIA's on Wednesday.
00:04NVIDIA.
00:04NVIDIA.
00:05NVIDIA.
00:05NVIDIA.
00:06I like how you described NVIDIA earnings earlier as the macro event of the week,
00:11because micro is now macro.
00:13That's how big this AI company's spending has gotten too.
00:16So one thing that we're paying attention to is CapEx kind of trajectory.
00:21I'm not just talking about NVIDIA, I'm talking about the whole AI complex.
00:25It emphasised that we are still in the AI CapEx inflation stage.
00:28It's good for chip names.
00:30It is good for the overall AI theme for now.
00:33It's kind of at the core of everything.
00:35It's been making a lot of money out of the whole AI theme,
00:37but it's also funding a lot of the AI theme now.
00:39So the fact that it's still got good numbers is important.
00:43They've also addressed directly head-on a lot of the major concerns.
00:47So I mentioned memory.
00:48They also addressed circular financing.
00:50They addressed the open-weight model growth.
00:53And those two things Jensen took on face front,
00:56he said those are both very positive developments.
00:59He wished he had invested even more.
01:01I think the biggest risk to NVIDIA here is cash call,
01:04which is that it becomes a victim of its own success
01:06in the sense that investors get very, very excited
01:08about the Anthropical IPO and sell some NVIDIA to fund it.
01:11Spread levels of these hyperscalers are slightly ahead of what normal corporates pay,
01:16and that entices investors to buy them.
01:19The real interesting question will be there will be a further increase in issuance volume
01:24in 27 and 28, in line with, obviously, NVIDIA's message around that big supply.
01:31This is going to be a huge capital need in many ways over generations.
01:36This is a shift which needs infrastructure of a significant scale.
01:40Historically, this was a U.S. versus China story,
01:43but actually the whole world is having to adapt.
01:45And we're seeing this AI kind of dynamic change operating models
01:48change the way in which businesses allocate capital.
01:51And I think it's very much now a global opportunity set.
01:54We're moving into the stage of the AI infrastructure cycle,
01:57where the first stage was really funded by cash flow from operations,
02:01primarily from the hyperscalers.
02:03Now the capital markets are taking over.
02:06debt is going to take a much more significant role in this.
02:10And so having the best technology really, really matters.
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